GLOBAL HOPE, INC

DECEMBER 31, 2019 AND 2018

GLOBAL HOPE, INC.

FINANCIAL STATEMENTS

Independent accountant's compilation report 1

Financial statements

Statements of financial position 2Statements of activities 3Statements of cash flows 5

Statements of functional expenses 6Notes to the financial statements 8

TABLE OF CONTENTS

Board of Trustees

Global Hope, Inc.

Broomfield, Colorado

BiggsKofford, P.C.Colorado Springs, Colorado

INDEPENDENT ACCOUNTANT'S COMPILATION REPORT

October 8, 2020

Management is responsible for the accompanying financial statements of Global Hope, Inc. (anonprofit organization), which comprise the statements of financial position as of December31, 2019 and 2018, and the related statements of activities, cash flows, and functionalexpenses for the years then ended, and the related notes to the financial statements inaccordance with accounting principles generally accepted in the United States of America. Wehave performed the compilation engagements in accordance with Statements on Standardsfor Accounting and Review Services promulgated by the Accounting and Review ServicesCommittee of the AICPA. We did not audit or review the financial statements, nor were werequired to perform any procedures to verify the accuracy or completeness of the informationprovided by management. Accordingly, we do not express an opinion, a conclusion, norprovide any form of assurance on these financial statements.

BiggsKofford, P.C. • Member AICPA

630 Southpointe Court, Suite 200 • Colorado Springs, CO 80906 • Phone: 719.579.9090 • Fax: 719.576.0126 • www.biggskofford.com

2019 2018

ASSETS

Cash and equivalents 22,306$ 34,814$

Investments 13,034 31,767

Prepaid expenses 2,716 1,966

Total assets 38,056$ 68,547$

LIABILITIES AND NET ASSETS

Liabilities:

Accounts payable and accrued expenses 675$ 640$

Total liabilities 675 640

Net assets:

Without donor restrictions:

Board designated - emergency funds - 7,665

Undesignated 35,857 59,518

Total without donor restrictions 35,857 67,183

With donor restrictions 1,524 724

Total net assets 37,381 67,907

Total liabilities and net assets 38,056$ 68,547$

GLOBAL HOPE, INC.STATEMENTS OF FINANCIAL POSITION


See accompanying notes and independent accountant's compilation report.

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Without Donor With Donor

Restrictions Restrictions Total

SUPPORT AND REVENUE

Contributions 284,128$ 4,044$ 288,171$

Events, net of expenses 85,854 - 85,854

Other income, net 1,471 - 1,471

Total support and revenue 371,453 4,044 375,497

RECLASSIFICATIONS

Satisfaction of program restrictions 3,244 (3,244) -

EXPENSES

Program expenses:

Romania operations 159,592 - 159,592

Kenya operations 94,787 - 94,787

India operations 75,355 - 75,355

Special fund expense 5,366 - 5,366

Mission team expense 7,185 - 7,185

Total program expenses 342,285 - 342,285

Support services:General and administrative 15,316 - 15,316

Fundraising 48,422 - 48,422

Total support services 63,738 - 63,738

Total expenses 406,023 - 406,023

Change in net assets (31,326) 800 (30,526)

Net assets, beginning of year 67,183 724 67,907

Net assets, end of year 35,857$ 1,524$ 37,381$

GLOBAL HOPE, INC.STATEMENT OF ACTIVITIES

YEAR ENDED DECEMBER 31, 2019


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Without Donor With Donor

Restrictions Restrictions Total

SUPPORT AND REVENUE

Contributions 310,832$ -$ 310,832$

Events, net of expenses 94,296 - 94,296 Investment loss, net 968 - 968

Total support and revenue 406,096 - 406,096

RECLASSIFICATIONS

Satisfaction of program restrictions 5,397 (5,397) -

EXPENSES

Program expenses:

Romania operations 143,943 - 143,943 Kenya operations 107,059 - 107,059

India operations 84,229 - 84,229 College fund expense 7,898 - 7,898

Mission team expense 11,968 - 11,968

Total program expenses 355,097 - 355,097

Support services:

General and administrative 16,968 - 16,968 Fundraising 69,534 - 69,534

Total support services 86,502 - 86,502

Total expenses 441,599 - 441,599

Change in net assets (30,106) (5,397) (35,503)

Net assets, beginning of year 97,289 6,121 103,410

Net assets, end of year 67,183$ 724$ 67,907$

GLOBAL HOPE, INC.STATEMENT OF ACTIVITIES



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2019 2018

CASH FLOWS FROM OPERATING ACTIVITIES

Change in net assets (30,526)$ (35,503)$

Adjustments to reconcile change in net assets to net

cash used in operating activities:

Net realized and unrealized gains on investments (637) (975)

(Increase) decrease in operating assets:

Accounts receivable - -

Prepaid expenses (750) 1,750

Increase (decrease) in operating liabilities:

Accounts payable and accrued expenses 35 328

Net cash used in operating activities (31,878) (34,400)

CASH FLOWS FROM INVESTING ACTIVITIES

Net proceeds from the sale of investments 19,370 26,310

Net cash provided by investing activities 19,370 26,310

Net decrease in cash and equivalents (12,508) (8,090)

Cash and equivalents, beginning of year 34,814 42,904

Cash and equivalents, end of year 22,306$ 34,814$

STATEMENTS OF CASH FLOWS

GLOBAL HOPE, INC.

YEARS ENDED DECEMBER 31, 2019 AND 2018


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Total Program G & A Fundraising

Grants to foreign organizations:

Romania 143,336$ 143,336$ -$ -$

Kenya 85,132 85,132 - -

India 67,679 67,679 - -

Special Funds 4,819 4,819 - -

Mission Teams 6,454 6,454 - -

Salaries and wages 65,166 22,808 - 42,358

Payroll taxes 3,944 1,414 15 2,515

Accounting 10,967 774 10,193 -

Advertising and promotion 475 - - 475

Office expenses 3,077 79 - 2,998

Information technology 5,528 4,422 1,106 -

Travel 117 41 - 76

Insurance 1,719 - 1,719 -

Other 7,610 5,327 2,283 -

Total 406,023$ 342,285$ 15,316$ 48,422$

GLOBAL HOPE STATEMENT OF FUNCTIONAL EXPENSES



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Total Program G & A Fundraising

Grants to foreign organizations:

Romania 122,173$ 122,173$ -$ -$

Kenya 90,868 90,868 - -

India 71,490 71,490 - -

Special Funds 6,704 6,704 - -

Mission Teams 10,158 10,158 - -

Salaries and wages 90,567 32,486 350 57,731

Payroll taxes 6,913 2,480 26 4,407

Accounting 9,195 - 9,195 -

Advertising and promotion 5,545 - - 5,545

Office expenses 2,464 641 1,823 -

Information technology 6,295 5,036 1,259 -

Travel 8,687 6,836 - 1,851

Insurance 1,698 - 1,698 -

Other 8,842 6,225 2,617 -

Total 441,599$ 355,097$ 16,968$ 69,534$

GLOBAL HOPE STATEMENT OF FUNCTIONAL EXPENSES



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1. ORGANIZATION

2. SIGNIFICANT ACCOUNTING POLICIES

GLOBAL HOPE, INC.NOTES TO THE FINANCIAL STATEMENTS


Global Hope, Inc. (the "Organization") was incorporated as a Colorado nonprofit corporation in1996. The Organization's primary purpose is to provide charitable, religious and educationalsupport to orphans in foreign countries.

The Organization equips their mission partners with the appropriate resources, education,mentoring, and financial support to effectively care for abandoned, orphaned, and at-riskchildren. The Organization also facilitates relationships with other organizations that can assisttheir mission partners in their ministry. Their goal is to help the mission partners achieve long-term sustainability.

Cash and equivalents

Basis of accounting

The accompanying financial statements have been prepared using the accrual basis ofaccounting in accordance with accounting principles generally accepted in the United States ofAmerica ("US GAAP").

Use of estimates

For purposes of the statement of cash flows, the Organization considers cash and all highlyliquid debt instruments purchased with an initial maturity of three months or less to be cash andequivalents.

The preparation of financial statements in conformity with accounting principles generallyaccepted in the United States of America ("US GAAP") requires management to makeestimates and assumptions that affect the reported amounts of assets and liabilities anddisclosure of contingent liabilities at the date of the financial statements and the reportedamounts of revenues and expenses during the reporting period. Actual results could differ fromthose estimates. The significant accounting policies followed are described below to enhancethe usefulness of the financial statements to the reader.

See independent accountant's compilation report.

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2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

In accordance with US GAAP, contributions received are recorded without donor restrictions orwith donor restrictions, depending on the existence and/or nature of donor restrictions, ifapplicable.

The costs of providing various program services and supporting activities have beensummarized on a functional basis in the statements of activities. Accordingly, certain costs havebeen allocated among the program services and supporting activities benefited. Expenses arerecorded when costs are incurred. Salaries and wages and payroll taxes are allocated based anestimate of time and effort spent working in each department during the year. Any costs thatcould be directly assigned to a specific function are allocated to that function.

Global Hope, Inc. is exempt from income taxes under Internal Revenue Code ("Code") Section501(c)(3).

The Organization evaluates the effect of uncertain tax positions, if any, and provides for thosepositions in accordance with the provisions of FASB ASC 450, Contingencies . No tax accrualfor uncertain tax positions has been recorded as management believes there are no uncertaintax positions for the Organization.

Income taxes

Contribution revenue

The financial statements report net assets without donor restrictions as those currently availablefor use in operations and those resources invested in property and equipment; and net assetswith donor restrictions, which represent resources restricted by donors as to purpose or by thepassage of time.

Classes of net assets

Contribution revenue is recognized when cash is received, when unconditional promises aremade, or when ownership of contributed assets is transferred to the Organization. Donor-restricted contributions with restrictions that are met in the same reporting period as thecontribution is recognized as support without donor restrictions.

Functional expenses


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2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Accounting pronouncements adopted

3. LIQUIDITY AND AVAILABILITY OF RESOURCES

2019 2018

Cash and equivalents 22,306$ 34,814$

Investments 13,034 31,767

Total financial assets 35,340 66,581

(1,524) (724)

Financial assets available to meet cash needs

for general expenditures within one year 33,816$ 65,857$

In 2019, the Organization adopted ASU No. 2018-08, Not-for-Profit Entities: Clarifying theScope and the Accounting Guidance for Contributions Received and Contributions Made ("ASCTopic 958") on a modified prospective basis. This ASU clarifies how a not-for-profit entitydetermines whether a resource provider is participating in an exchange transaction or acontribution, helps an entity to evaluate whether contributions are considered conditional orunconditional by stating that a conditional contribution must have (1) a barrier that must beovercome and (2) a right of return or release of obligation, and modifies the simultaneousrelease option currently in US GAAP, which allows a not-for-profit entity to recognize arestricted contribution directly in net assets without donor restrictions if the restriction is met inthe same period that revenue is recognized.

Subsequent events

Less amounts unavailable for general

Management has evaluated subsequent events through the date of the attached independentaccountant's compilation report, the date on which the financial statements were available to beissued.

expenditures within one year due to:

Donor restrictions

Financial assets available for general expenditures, that is, without donor or other restrictionslimiting their use, within one year of the statement of financial position date, comprise thefollowing on December 31:


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3. LIQUIDITY AND AVAILABILITY OF RESOURCES (CONTINUED)

4. DISCLOSURE ABOUT FAIR VALUE OF ASSETS AND LIABILITIES

Investments

As part of the organization's liquidity management plan, it has a policy to structure its financialassets to be available as its general expenditures, liabilities and other obligations come due. Inaddition to financial assets available to meet general expenditures over the next 12 months inthe table above, the Organization also operates in accordance with a board approved budgetand anticipates collecting sufficient revenue to cover general expenditures.

US GAAP defines fair value as the price that would be received to sell an asset or paid totransfer a liability in an orderly transaction between market participants at the measurementdate. Therefore, the term "price" refers to the exit price as opposed to the entry price, which isthe price paid to acquire the asset or received to assume the liability. US GAAP also establishesa fair value hierarchy, which requires an entity to maximize the use of observable inputs andminimize the use of unobservable inputs when measuring fair value. The standard describesthree levels of inputs that may be used to measure fair value:

The Organization invests in various mutual funds, exchange-traded funds and stocks. Becausequoted market prices are available for identical securities in an active market, these securitiesare classified within Level 1 of the valuation hierarchy.

Level 1 - Quoted prices in active markets for identifiable assets or liabilities.

Level 2 - Observable inputs other than Level 1 prices, such as quoted prices for similarassets or liabilities; quoted prices in active markets that are not active that are observable orcan be corroborated by observable market data for substantially the full term of the assets orliabilities.

Level 3 - Unobservable inputs that are supported by little or no market activity and that aresignificant to the fair value of the assets or liabilities.

Following is a description of the valuation methodologies used for instruments measured at fairvalue on a recurring basis and recognized in the accompanying statement of financial position,as well as the general classification of such instruments pursuant to the valuation hierarchy.


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4. DISCLOSURE ABOUT FAIR VALUE OF ASSETS AND LIABILITIES (CONTINUED)

Level 1 Level 2 Level 3

Mutual funds $ 13,034 $ - $ -

Level 1 Level 2 Level 3

Mutual funds $ 31,767 $ - $ -

5. NET ASSETS WITH DONOR RESTRICTIONS

2019 2018

DJ Atkinson Fund -$ 486$

Education Fund 219 238

Endowment fund 1,305 -

Net assets with donor restrictions 1,524$ 724$

6. FOREIGN PROGRAMS

The Organization provides monthly operations funding for the missions in Romania, Kenya, andIndia. Their commitments fluctuate from month to month and are impacted by currencyexchange rates. The reasons for the large difference between program expenses in Romania,Kenya and India is due to large cost of living differences between the countries and the fact thatin Romania, the Organization is the primary funding source that includes mission staff for Ana’sHouse, and support of foster families in Arad, Romania. The Organization’s mission is to partnerwith the local church and leaders to support their fund raising efforts and to create opportunitiesfor improved self-sufficiency.

Net assets with donor restrictions consists of the following as of December 31:

December 31, 2018

Fair value measurements of assets recognized in the accompanying financial statements,measured at fair value on a recurring basis, consist of the following as of:

December 31, 2019


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7. DONATED SERVICES

8. CONCENTRATIONS

9. SUBSEQUENT EVENT

For the years ended December 31, 2019 and 2018, one donor accounted for approximately14% and 26% of total contributions, respectively.

The value of donated services is not reflected in the accompanying financial statements sincethere is no objective basis available by which to measure the value of such services. However, asubstantial number of volunteers have donated significant amounts of their time to theOrganization's programs.

On 11 March 2020, the World Health Organization characterized an outbreak of novel strain ofcoronavirus (“COVID-19”) as a pandemic and on 13 March 2020, the United States declared anational emergency. As a result, the current economic environment has presented companiesand organizations with unprecedented circumstances and challenges. Potential impacts to theOrganization include disruptions and restrictions on the ability of employees to work, as well astravel and other restrictions imposed by governments. COVID-19 is also expected to adverselyaffect economies and financial markets in the United States and throughout the world. Theextent of the impact on the Organization’s financial position, operating results and cash flowswill depend on future developments, including the duration and spread of the outbreak, whichare highly uncertain and cannot be predicted.

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GLOBAL HOPE, INC